Hi there, everyone. My husband and I have been struggling with budgeting issues for months. After conferring this weekend, we finally decided to post and see if others have any suggestions for things that we’re not seeing.

As background, we have been married for nine months. He has three sons (19, 16, and 12) and I have one daughter (6). His oldest son is a freshman in college. We live 365 miles apart because of our work and kid situations. For now, that is unlikely to change. We also have almost entirely separate budgets. We have a joint checking account, but have used it only for savings, tax prep costs, and vacations.

The problem is in his side of the budget, so (with his permission), I’m going to lay out the details of his budget and ask for advice.

Joint expenses is his portion of our shared expenses, including regular commuting to each other’s houses, other joint travel, occasional meals out together, joint gifts, and a shared phone line. There are two extra paychecks per year that can be allocated to other things; all of the regular expenses are done assuming 24 paychecks even though he’s actually paid 26 times a year.

So. It should be that he has a positive cash flow of about $300 a month, plus the two extra paychecks. We should be able to put that into building his e-fund and a freedom fund.

And yet, somehow, we never get there. We’ve been tracking his budget for more than a year, and just cannot seem to get the holes plugged. Over and over again, we have had to go negative in a folder (when his 2001 mini-van with 176k miles on it needs work, repairing it is a need, not a want) and dig that hole out rather than actually building anything up for a freedom fund. I’ve tried 8 ways from Sunday to start building them up, and after a year of trying, I know I need some help. We’re majorly negative in the vehicle folder from a $1,400 repair last June. The drop in gas prices has helped a lot, but we still have a long way to go. He’s also negative in our joint expenses folder (long story that amounts to “we screwed up our math”). And last week, there was a $1,500 net tax bill without reserves built up to pay for it.

Right now today, his barn needs to have the roof replaced because of a wind storm. The insurance covers 60% of the cost, so he’ll probably just have half the roof done. There was a septic backup a few months ago that completely trashed the basement bathroom, and that needs to be redone. We ripped up all the carpet and bleached everything ourselves, but it’s not really usable that way. There are several other “wants” in the household, like re-doing 20 year old paint jobs in kids’ hard-used rooms. We’re putting those off, but they still nag at me because I can’t see a way to get anywhere near dealing with them. And I worry constantly about his van, which was obviously built well, but is still showing signs of wear after so many years and miles.

Having a son in college has taken a huge bite out of the regular income flow, of course, but it’s not something we can consider temporary. We’ll have at least one kid in college for 14 out of the next 16 years.

So, can anyone give a hand with this and provide some suggestions? I know we need to build an emergency and freedom fund for him, and fund them both enough to cover all the random $1,000 expenses that come up when you have a home and a car and a few kids. I am completely stumped about how to do it, though, and it’s worrying both of us quite thoroughly.

We’ve been tracking his budget for more than a year, and just cannot seem to get the holes plugged.

Well, not being able to "plug the holes" means that the budget isn't accounting for those expenses. So DH needs to figure out a way to allocate more money to those expenses, other than the non-existent 'freedom fund'.

When you say 'tracking his budget', does that mean he is tracking every penny he spends? Or just the major items? Because tracking every penny is critical to finding the holes to plug.

We’re majorly negative in the vehicle folder from a $1,400 repair last June.

Still carrying this 'negative' from nearly a year ago, without making it up by now, means that he is not budgeting enough for vehicle expenses. If he wanted to account for that expense within 7 months, he should have been budgeting $482 a month toward vehicle expenses, instead of $282. Otherwise, why are you bothering to carry the 'negative'?

Having a son in college has taken a huge bite out of the regular income flow

Okay, he's spending nearly $10k a year to keep this kid in college. How much is DS contributing? Is he taking out student loans? Much as he might want to, DH doesn't seem to be able to afford this much for DS at this time. Community college is a good option for the first couple of years.

Unless he can pare expenses elsewhere, he can't afford to contribute so much for college expenses.

I suppose that "joint expenses" isn't the marijuna budget, but perhaps that can be looked at.

Life insurance is a worthwhile expense, but is it for term life insurance or for whole life which is probably not affordable?

A lot of expenses that people go overboard on look pretty reasonable, such as telecommunications, kids clothes and allowance among others --- that's good! I'd apply that to some of those other expenses I mentioned.

While it's nice to help children with college expences --- that's a luxury. And it's one he can't afford to spend much on, especially with two more children who will no doubt expect comparable help.

I'd take a look at the charitable contributions for cutbacks as well. That's nice to do --- but probably too much of a nice thing.

If he is still missing about $300/mth, then he is probably not tracking every penny. Ask him to write down EVERY CENT he spends in a little notebook for one month; that will help you all figure out that the spare money is being drained by candy bars or college-age sons or school bake sales or work lunches or...or...or...

He is spending $800/mth on tuition, room&board, etc. for the college-age child. Is this child attending college near home or away? Can he attend a local college and live at home? Is he eating at home any or is that $525 in groceries for only DH and the two remaining sons?

Is your DH receiving child support? If not, he should be; if he is, perhaps he can request an increase considering the eldest child is in college. Some states cut off child support at 18; others maintain it until 23 if the child is in college.

Are the older sons working? If not, I would get them hot on it. Even the 12-yr-old can be cutting lawns or shoveling snow. A part-time job for the 16-yr-old would allow him to save a bit more than $40/mth towards college and with college costs increasing, he's going to need it. The 19-yr-old is certainly old enough to learn how to manage a job and school; lots of people work while putting themselves through college entirely. It might take him a bit longer to finish but...if your DH is old enough to have a 19-yr-old, he needs to be putting a bit more into savings and retirement. The children can always get student loans but no one is going to loan him retirement money.

Can he work on the barn roof himself? If he's pretty handy, he might be able to use the insurance money for materials and do the labor himself. (that also saves the $52/mth fitness cost).

That life insurance cost seems high to me; I pay $250/year for a half-million, twenty-year term policy. I would suggest looking at that and discovering exactly for what it is that he is paying.

What is the $159 Household expense? The $129 Kids' School expense? Can he cut his telecommunications expense? Does that cover Internet or is that a separate expense elsewhere?

As far as painting the children's rooms, look at Home Depot or Lowe's for Oops! paint. This is when someone else buys a paint color, realizes it's not what they want and brings it back. What you can do then is buy that paint for $5 or so, which significantly decreases the price even if you buy a glaze or other paint color at full value to stretch it or change the shade. The "children" are certainly old enough to paint their own rooms so it's not like you need to hire a painter, just cover the costs of paints and rollers (which are reusable if washed properly and generally inexpensive even if not).

Over and over again, we have had to go negative in a folder (when his 2001 mini-van with 176k miles on it needs work, repairing it is a need, not a want) and dig that hole out rather than actually building anything up for a freedom fund. I’ve tried 8 ways from Sunday to start building them up, and after a year of trying, I know I need some help. We’re majorly negative in the vehicle folder from a $1,400 repair last June. The drop in gas prices has helped a lot, but we still have a long way to go. He’s also negative in our joint expenses folder (long story that amounts to “we screwed up our math”). And last week, there was a $1,500 net tax bill without reserves built up to pay for it.

Your envelope budgeting system is telling you that he is not budgeting enough for the lumpy expenses. $282 per month for maintenance of a 2001 mini-van with 176k miles sounds light to me. I'm budgeting $300 for maintenance of cars, the bulk of which goes to a 1998 Forester with 108k miles. Throw in gas, insurance, and licensing, and my auto budget is $478 per month; and I'm not budgeting for gas in the car that daughter drives. The maintenance part of auto probably should be broken out as a savings fund, and it probably needs to be bigger than his total "auto" line is right now. (Looking at how much that van has cost in repairs over the past year might prompt you to do an analysis on car replacement . . .)

Right now today, his barn needs to have the roof replaced because of a wind storm. The insurance covers 60% of the cost, so he’ll probably just have half the roof done. There was a septic backup a few months ago that completely trashed the basement bathroom, and that needs to be redone.

$50 for home repair looks light to me. I budget $100 per month, for a small house with no barn. Granted, the bulk of this goes to furnace a/c contract service and lawn service; but I also have a home improvement category that I fund when I have positive cash flow to budget.

So, can anyone give a hand with this and provide some suggestions? I know we need to build an emergency and freedom fund for him, and fund them both enough to cover all the random $1,000 expenses that come up when you have a home and a car and a few kids. I am completely stumped about how to do it, though, and it’s worrying both of us quite thoroughly

With a kid in college, at $800 tuition per month, it might just be time to live with deficit spending. That's fine, assuming there are savings designated for college that can be drawn down. If this is not the case, you and he need to think about how to handle the college expenses. Does he ask his son to get loans or go to a less expensive college? Does he get PLUS loans? What do the two of you do when the next son hits college?

The beauty of a zero based envelope budgeting system is that it adds up the cost of all the stuff you want to do, so you have a harder time double counting stuff. It looks like you and he have been trying to undercount the cost of some lumpy expenses, notably auto and home repair. Possibly the cost of college could have been underforecast, and that's coming home to bite you. What you do about this with an envelope based budgeting system is, you take money from other envelopes and *spend less on the categories you robbed.*

Unfortunately, I'm not seeing a lot of categories that will be easy for him to cut. He may have to look at getting the kids to fund college through loans, moving to someplace smaller and cheaper, and/or cutting back on what kid activities get funded. Alternatively, he may be looking at deficit spending until all the kids get through college.

I haven't had a chance to read all of the responses, but wanted to clarify something I saw in the first couple. When I say that these are the expenditures, I mean it. We use Mvelopes and track every single penny we spend. The only thing I can't track directly to a purchase is the $24 in unallocated cash. What I showed in the original post was actual average expenses for the last three months for regular expenses (utilities, groceries, etc.), the correct average per month for quarterly and annual expenses, and the actual contributions for savings amounts.

When I say that these are the expenditures, I mean it. We use Mvelopes and track every single penny we spend. The only thing I can't track directly to a purchase is the $24 in unallocated cash. What I showed in the original post was actual average expenses for the last three months for regular expenses (utilities, groceries, etc.), the correct average per month for quarterly and annual expenses, and the actual contributions for savings amounts.

That explains a bit. If I understand what you're saying correctly, the missing $303 per month would have gone toward paying back some of those negative envelopes, to the tune of $909 over your three month baseline?

Three months is probably not a long enough baseline, and some of the stuff that looked low to me just indicates that he didn't hit any big lumps in the lumpy expense categories in those three months. You can also count on "his clothes and personal care" to have some higher expenses from time to time; sometimes a guy can go for over a year without major clothing purchases, but when he has to buy he has to spend a few bucks.

It looks very much like a case of underestimating lumpy expenses, and thinking of them as one-time events when they occur. There are multiple ways to handle this, but they all boil down to putting money aside for the lumps; and the lumps tend to be bigger than most people think they will be on the first pass through the budget.

Possible areas to cut back so that home & car repair can be adequately funded:

Instead of $175/month for charity, could he and the boys donate one Saturday per month to Habitat for Humanity, Meals on Wheels, or something?

Do the kids really need $176/month worth of activities? My kids main activities were camping & hiking & learning about science & art with parents and hanging out with friends, but then neither of mine were interested in sports.

What does kids school $129/month mean? Seems too little for pvt school tuition and too much for school lunches. Other than a rare field trip or art supplies, I don't remember my kids' schools requiring money.

Could he save on his grocery bill by making more meals from scratch, more vegetarian meals or meals that use smaller portions of meat such as veggie-heavy soups & stir-fries & curries, canned/frozen fish instead of fresh, braising & stewing using cheaper cuts of meat than, say, grilling requires, shopping cheaper markets and sales, couponing?

It would be nice if he could replace his minivan with a newer but still used Honda Accord or Civic or similar. Save a lot on repair cost and gas.

And as others have pointed out, he really can't afford $800/month for college, not with 2 more kids to support. Can he reduce this this to $4-500/month? My children were responsible for 1/3 of their college tuition & room & board, my ex and I for 1/3 apiece as well (with merit scholarships coming solely out of the child's portion, ordinary financial aid out of all 3). I did end up paying about the same as your husband is paying, and on a similar salary, but I lived with my husband who paid more than half our one-house expenses on his larger salary, so it was much easier for me.

Good luck! Living so far apart must be stressful as well as expensive. IF there's any way you could combine households, that would save a lot too.

I'm glad no one's (yet) suggested cutting the grocery budget. A friend once said teenage boys aren't human, they're just appetites with legs, and I appreciated that when my own DS hit the teenage years.

The budget looks reasonable and disciplined to me. So a little tweaking should do it. The catch is that there's not a lot of room for tweaking.

I'd drop:- charity (family first, and when he can afford it, charity can be the 1st item to add back in),- gifts (the kids don't believe in Santa any more, and can give their friends birthday cards instead of going to the parties),- fitness (jogging is free),and- kids' allowances (they are old enough to mow lawns, pet-sit, get summer jobs in fast food, etc, to cover their own non-food-clothing-shelter-school expenses). My own kids never got allowances. However, I recognize that, especially in a step-parenting situation, it might be a bad idea to suggest cutting the other parent's kids' allowances, even if it makes sense on paper. They might be more likely to think "evil stepmom" than "we're sacrificing so DS1 can go to college."

So, that's $370/month.

...his barn needs to have the roof replaced because of a wind storm. The insurance covers 60% of the cost, so he’ll probably just have half the roof done...

He needs the barn for his business? At first I assumed so, but I do know people who've bought houses with barns who didn't need the barns. So they just used them as garages, or for storage. Seems to me that replacing half a roof still leaves a leaky roof, so if the barn isn't an income-producing item, it would be better to tear it down than to maintain it.

I wouldn't recommend doing roofing or tear-down oneself; one slight slip could end up costing way more in medical expenses than what would have been saved on labor.

I'm assuming DS1 is already exploring ways to reduce college costs. RA's, for example, get room & board; and there are other on-campus jobs available for salary. It's competitive, though, so I can't just blithely say, "DS1 should be an RA;" all he can do is apply. Others have suggested loans, which are a possibility, but if he can possibly swing college without loans that would of course be better.

Well, one major item I see missing is home maintenance. I assume that is not "household." I think of "household" as toilet paper, detergent, etc. It seems that you probably need to budget a reasonable amount for that. The barn issue and septic tank are not and will not be isolated occurences. In years when I had more income coming in, I budgeted $600/month for this (I have an old house), and now I am budgeting $250. It doesn't go away even if you think you won't spend anything on it.

The other thing is that "cash" isn't a budget category and needs to go. presumably he can fill that into the other categories.

"Fun, books, movies, music" seems way too low at $4/month. Does he get a newspaper? magazines? Ever buy a book or go to a movie with the kids? I cannot remember the last time I bought a book for $4 or less. That seems too low for me. There's frugal, and then there's unrealistic.

Oh - the comment about tearing down the barn. I'd not do this. In many zoning jurisdictions some non-conforming structures are grandfathered in, but once gone cannot then be replaced. My lot once had a garage building at the back of the lot. Most houses in my neighborhood have these and are mostly used as studios or out-buildings. But it was torn down some time many years ago. I cannot build such a structure today even to replace what was there, as it would not be allowed.

When I say that these are the expenditures, I mean it. We use Mvelopes and track every single penny we spend.

Okay, so DH is tracking every penny. Why do the expenditures not add up to the income, then?

If DH is tracking every penny, and can't seem to find money to put into the freedom fund and/or emergency fund, then he must be spending every penny, right? So why do his expenditures NOT add up to his income? Those are the 'holes' you need to find and plug.

I also agree that looking at the spending over 3 months is probably not long enough - a year would be the minimum, to capture annual expenditures. That way, DH can also get a look at the seasonality in the 'lumpiness' of expenditures.

This is the first of several replies. I've lumped together multiple people's comments just trying to keep from duplicating too much. I think there'll still be some duplication later, but perhaps less than otherwise.

Well, not being able to "plug the holes" means that the budget isn't accounting for those expenses. So DH needs to figure out a way to allocate more money to those expenses, other than the non-existent 'freedom fund'.

I think Patzer nailed it when he said we need a way to deal with the “lumpy” expenses.

Still carrying this 'negative' from nearly a year ago, without making it up by now, means that he is not budgeting enough for vehicle expenses. If he wanted to account for that expense within 7 months, he should have been budgeting $482 a month toward vehicle expenses, instead of $282. Otherwise, why are you bothering to carry the 'negative'?

Right. The average costs over the last year have been $387, including that $1,400 expense. We have only budgeted $300 a month. A “lumpy” expense problem, because that $1,400 wasn’t in the original setup of the budget.

Which reminds me, this is the first time my husband has ever budgeted this way. Previously his method was, “Do I have $10,000 available in my checking account [he didn’t have a savings account] if something bad happens?” I have seen tremendous improvements in both his understanding and his ability to work with a budget over the last year. We're just not done yet.

Okay, he's spending nearly $10k a year to keep this kid in college. How much is DS contributing? Is he taking out student loans? Much as he might want to, DH doesn't seem to be able to afford this much for DS at this time. Community college is a good option for the first couple of years.

While it's nice to help children with college expences --- that's a luxury. And it's one he can't afford to spend much on, especially with two more children who will no doubt expect comparable help.

He is spending $800/mth on tuition, room&board, etc. for the college-age child. Is this child attending college near home or away? Can he attend a local college and live at home? Is he eating at home any or is that $525 in groceries for only DH and the two remaining sons?

Several people asked about college expenses, what they include, and more detail about the situation overall.

DS1 attends the local college. His mom is an employee there, and that got him a muuuuch better financial aid deal than they would have gotten anywhere else. DS1 took several classes at the local community college during his senior year of college. Not a single credit transferred, so I don't consider that a worthwhile option. DS1 could possibly go to a state school and spend less, but the calculations we did made that seem unlikely. So I think, for the moment, he’s at the best school for the money that we can easily locate.

He has an on-campus job. Took forever to finally get one, but he’s got it, seems to like it, and has started to get paychecks. Good steps on his part; he applied for quite a few jobs in high school and never got anything. He comes home for a meal on occasional weekends, but not very often. He has expressed interest in being an RA, but as another poster noted, he has to apply and be accepted. He's quite introverted, so I'm not sure whether he'll get one of those positions or not.

The $800 a month goes directly toward his tuition, room, and board, and it covered somewhat more than half his school-related expenses this year. DS1 and DS1’s mom are both paying for parts of the rest, including DS1 taking out some (so far) fairly small loans. We would all like to minimize the financial burden he comes out of school with. Also, DS1 pays for books and most of his own spending money. DH still gives him $20 a month for allowance, which combined over a year might pay for a semester of books. (Oh, and whoever said that the Step-Mom taking away allowances might not work out well? Thanks for thinking of that. You're right.)

Several people have taken the view that the college expenses are too high, and they may be. Though we don’t want to do it, we’ve already reduced everything it was easy to reduce.

Life insurance is a worthwhile expense, but is it for term life insurance or for whole life which is probably not affordable?

It’s whole life insurance, which I have many times read is not that great a deal. However, it’s also one of the very few avenues that DH has for savings any money, so after much review and thought, we decided to leave it be after the last time we reviewed all this stuff. We'll look at it again, though.

A lot of expenses that people go overboard on look pretty reasonable, such as telecommunications, kids clothes and allowance among others --- that's good! I'd apply that to some of those other expenses I mentioned.

DH and his boys are pretty good shoppers when it comes to clothes, and the boys are pretty careful with their money. DS1 uses his allowance for college stuff, DS2 mostly pays for gas (his mom owns the car) with his, and DS3 has an amazing pile of cash on his dresser that his dad occasionally collects and puts in his savings account for him.

I'd take a look at the charitable contributions for cutbacks as well. That's nice to do --- but probably too much of a nice thing.

DH feels pretty strongly about his tithe. He’s already reduced it about $50 a month, and I’m not sure how he’ll feel about reducing it more. We'll talk about that, too.

Is your DH receiving child support? If not, he should be; if he is, perhaps he can request an increase considering the eldest child is in college. Some states cut off child support at 18; others maintain it until 23 if the child is in college.

Yes, he does receive child support. In his state, child support is only for children under 18, so only the younger two receive it. At the moment, that money is going toward building college savings for the two younger boys. DH and his ex built some savings for each of their kids, but not enough to pay for college. And then they got divorced, which toasted both their finances pretty well.

So when DH and I talked about it, we decided we would rather put all of it toward the boys’ education and try to live on just his income instead. That’s another area we may have to revisit if we can’t rebalance DH’s income as it currently stands. Also, given the particular circumstances, the child support money isn't really a reliable income stream, so we've avoided putting it into the regular budget assumptions.

Are the older sons working?

DS1 has a job on campus and seems to like it. He just got it a few weeks ago. DS2 (16) is looking for a summer job, but not working right now. There are high hopes for a job at the local agricultural stations. That said, though, they live in a rural area and jobs are hard to come by. DS3 could earn $100 a week in the summer in my neighborhood. In his? He can't get anywhere to do things like babysitting or lawn cutting, and they don't even consider kids for paper routes. It has to be drivers over 21.

...if your DH is old enough to have a 19-yr-old, he needs to be putting a bit more into savings and retirement. The children can always get student loans but no one is going to loan him retirement money.

DH just turned 49. He works for the federal government and will have both a thrift savings plan and a pension when he retires. I would like him to put more away for retirement, but even at his current savings rate, his retirement looks better than mine does right now.

Can he work on the barn roof himself? If he's pretty handy, he might be able to use the insurance money for materials and do the labor himself. (that also saves the $52/mth fitness cost).

Someone else suggested that this is not a good idea, and I agree. DH has replaced shingles before and knows how to do it, but the storm pulled up a lot of stuff – and exposed rotten plywood underneath. The last thing I want is to have the human and financial costs of a broken leg or a cracked skull to deal with.

Someone else asked if the barn is used for DH’s work. No, it’s not. He lives on 2 ½ acres with pasture and a barn in the back half, but does not currently have any animals. With our living situation, he’s away every other weekend, making it impractical for him to have animals right now. We’ve talked about the possibility of turning the barn and pasture into an income source, but haven’t got great ideas for how to do that at the moment.

What is the $159 Household expense?

This is something of a catch-all category. It includes the newspaper, postage, household "stuff" like a new lamp or towels, computer supplies (ink, paper), lawn mower maintenance, lawn mower gas, and occasional minor household maintenance and repair, like having the septic system pumped or the washing machine gasket replaced.

The $129 Kids' School expense?

There are actually a surprising number of costs associated with the boys’ schooling. The largest expenses this year have been DS2’s band trip to NYC and DS3’s week-long camp, plus music lessons and instruments, fees for their music activities, etc.

Can he cut his telecommunications expense? Does that cover Internet or is that a separate expense elsewhere?

That includes land line, cell phones, and Internet. We’ve reduced these expenses already, and I don’t see easy ways to reduce them further.

Your envelope budgeting system is telling you that he is not budgeting enough for the lumpy expenses.

Yes, exactly! Thank you, Patzer, for putting it so succinctly. I was having a heck of a time putting it all together into a single, clear explanation.

$282 per month for maintenance of a 2001 mini-van with 176k miles sounds light to me. I'm budgeting $300 for maintenance of cars, the bulk of which goes to a 1998 Forester with 108k miles. Throw in gas, insurance, and licensing, and my auto budget is $478 per month; and I'm not budgeting for gas in the car that daughter drives. The maintenance part of auto probably should be broken out as a savings fund, and it probably needs to be bigger than his total "auto" line is right now. (Looking at how much that van has cost in repairs over the past year might prompt you to do an analysis on car replacement . . .)

We’ve done that analysis. The van has actually done amazingly well, all things considered. BUT. We also know that the next major repair is probably the tipping point between “repair” and “replace.” That’s why the car fund exists. Problem is, it has all of $220 in it. This is the box we’re in that I can’t seem to dig us out of.

$50 for home repair looks light to me. I budget $100 per month, for a small house with no barn. Granted, the bulk of this goes to furnace a/c contract service and lawn service; but I also have a home improvement category that I fund when I have positive cash flow to budget.

Yup. Based on the age of his house (25 years) and its overall condition, as well as the repair bills since I’ve known him, I would guess we need at least $1,000 a year and I would be more comfortable with $2,000 a year (that would cover some of the wants as well as the OMG needs).

With a kid in college, at $800 tuition per month, it might just be time to live with deficit spending. That's fine, assuming there are savings designated for college that can be drawn down.

Heh. If I could go back fifteen years and suggest to DH and his ex that they do that, I would. But. We’re here today and all I can do is deal with the present and try to make the next three rounds easier on everyone.

If this is not the case, you and he need to think about how to handle the college expenses. Does he ask his son to get loans or go to a less expensive college? Does he get PLUS loans? What do the two of you do when the next son hits college?

Much of this is covered above, but I’ll re-emphasize that we’re putting money for the next two boys away as fast as we can. And DD’s college funds, in spite of the godawful things that happened in the last year, still exist.

… What you do about this with an envelope based budgeting system is … *spend less on the categories you robbed.*

Unfortunately, I'm not seeing a lot of categories that will be easy for him to cut.

Yeah. We already cut the easy stuff. That was last year, and it has helped. Just not enough.

He may have to look at getting the kids to fund college through loans, moving to someplace smaller and cheaper, and/or cutting back on what kid activities get funded. Alternatively, he may be looking at deficit spending until all the kids get through college.

I wonder what 16 years of deficit spending would look like. Ugh. Makes me a bit seasick just thinking about it.

These are not happy choices.

No kidding.

That explains a bit. If I understand what you're saying correctly, the missing $303 per month would have gone toward paying back some of those negative envelopes, to the tune of $909 over your three month baseline?

Exactly.

Three months is probably not a long enough baseline, and some of the stuff that looked low to me just indicates that he didn't hit any big lumps in the lumpy expense categories in those three months.

Good point.

You can also count on "his clothes and personal care" to have some higher expenses from time to time; sometimes a guy can go for over a year without major clothing purchases, but when he has to buy he has to spend a few bucks.

Clothes are an area where he’s been able to wait and only spend when he has the money in his envelope to do it. This is also an area where I’ve started making a habit of giving gift cards to the stores he likes to shop at. I do the same thing for gifts for the older two boys.

It looks very much like a case of underestimating lumpy expenses, and thinking of them as one-time events when they occur. There are multiple ways to handle this, but they all boil down to putting money aside for the lumps; and the lumps tend to be bigger than most people think they will be on the first pass through the budget.

One thing that came to mind for me is that we currently have quite a few categories for lumpy expenses. Some of them are funded, some are not. For example, the “legal” folder is funded at $1,000 based on the costs the last time his ex decided to take him back to court. (Yes, really. Did I mention he lives in a very small town?) So perhaps one of the problems is that we build up a reserve for a lumpy expense, and then it doesn’t happen. Reserve sits there while we go in the hole somewhere else. I’m not sure of that, though, and am willing to believe my logic is fuzzy.

As far as painting the children's rooms, look at Home Depot or Lowe's for Oops! paint. This is when someone else buys a paint color, realizes it's not what they want and brings it back. What you can do then is buy that paint for $5 or so, which significantly decreases the price even if you buy a glaze or other paint color at full value to stretch it or change the shade. The "children" are certainly old enough to paint their own rooms so it's not like you need to hire a painter, just cover the costs of paints and rollers (which are reusable if washed properly and generally inexpensive even if not).

Yes…. I know. And. We painted the main area of the house ourselves. So I know this is an option, but only if we do it at a time when I’m there for a week or two and we can get the job done quickly. Six months of breathing spackle fumes (my dear man is, err, a perfectionist) put something of a strain on all of us. Perhaps it’ll be a project for this summer when DD and I are there on vacation.

Instead of $175/month for charity, could he and the boys donate one Saturday per month to Habitat for Humanity, Meals on Wheels, or something?

We’ll talk it over. The money mostly goes to his church tithe, but there might be an in-kind donation the church needs that he could provide.

Do the kids really need $176/month worth of activities? My kids main activities were camping & hiking & learning about science & art with parents and hanging out with friends, but then neither of mine were interested in sports.

Most of this expense is the unending 4H “chicken project.” Which involves the boys having well over 100 show chickens (at their mom’s house). The budget has been reduced here, and it is a very sore point between DH and his ex. One of the many hard choices available to take this on, which would likely create a (not small) fight with his ex and with the boys. It might genuinely be easier to go without groceries.

Could he save on his grocery bill by making more meals from scratch,

They cook almost everything from scratch. Up to and including making their own bread. The next step would be growing and canning/freezing their own, or raising their own animals. Both are possible – and time-consuming. For this year, he’s going to plant tomatoes and beans.

They’re definitely meat eaters, and just picked up the annual quarter of a beef cow. It was a bigger cow this year, and cost more than $200 more than last year’s. This is an area where I can see that they could save some, but not a whole lot.

using cheaper cuts of meat than, say, grilling requires,

All told, the quarter of a cow averaged just under $3 a pound. Not the cheapest, obviously, but the quality is much better than I’ve seen at the store for the same price. And lordy, I had one of the steaks on Saturday. Heaven. (Since there was so much more meat this year, I’m going to buy some of it from him. Tough to transport it 365 miles and keep it frozen, but we think we can do it.)

shopping cheaper markets and sales, couponing?

He does most of his shopping at Wal-Mart and a local Amish deli, both of which have prices that I envy (and take advantage of, for things I can transport) every time I’m there. There are certainly possibilities for better use of sales and coupons, which might save him some.

It would be nice if he could replace his minivan with a newer but still used Honda Accord or Civic or similar. Save a lot on repair cost and gas.

Don’t I know it! We’ve been talking about that for two years. It’s one of those “takes money to save money” deals, though, and so far we’re a bit behind on finding the money. Oh, one thing I should say about the car is that when he does find one, I’ll contribute $2,000 toward it. He contributed $2,000 to my (emergency) purchase last fall. Looking back on it, I wish I’d told him not to do that, but at the time we thought his budget was under control and that I was going to have a $10,000 tax bill come April. Turns out my bill was smaller than his. In any case, we’ve been watching for a good opportunity on a new-to-us Civic or Accord or something similar.

Good luck! Living so far apart must be stressful as well as expensive. IF there's any way you could combine households, that would save a lot too.

We would love to combine households. In order to do it, he would have to come toward me. My custody agreement and unique circumstances mean I can’t leave the DC area. And that would mean that he would need to be able to both pay for college AND pay child support, because it’s unlikely the boys would come along. That would probably cost about as much as his current mortgage. We’re still willing to do it, but finding a job in his area of specialty is not easy. If anyone knows of a good job for a research scientist/agricultural engineer in the DC area, let me know. And yes, we peruse USAJobs on a weekly basis.

I'm glad no one's (yet) suggested cutting the grocery budget. A friend once said teenage boys aren't human, they're just appetites with legs, and I appreciated that when my own DS hit the teenage years.

Heh. When I watch DS2 eat a meal, I always wonder where he puts it all. It’s starting to be the same with DS3.

The budget looks reasonable and disciplined to me. So a little tweaking should do it. The catch is that there's not a lot of room for tweaking.

Thank you. And yeah, I know.

I'd drop: - charity (family first, and when he can afford it, charity can be the 1st item to add back in), - gifts (the kids don't believe in Santa any more, and can give their friends birthday cards instead of going to the parties), - fitness (jogging is free),and - kids' allowances (they are old enough to mow lawns, pet-sit, get summer jobs in fast food, etc, to cover their own non-food-clothing-shelter-school expenses). My own kids never got allowances. However, I recognize that, especially in a step-parenting situation, it might be a bad idea to suggest cutting the other parent's kids' allowances, even if it makes sense on paper. They might be more likely to think "evil stepmom" than "we're sacrificing so DS1 can go to college."

So, that's $370/month.

Hmmm. Well, as I said, I don’t think we’re going to drop the allowances right now, and probably won’t zero out everything else on this list. But this gives him an incremental place to start, and both of us a place to start talking from. Thank you, YewGuise.

The other thing is that "cash" isn't a budget category and needs to go. presumably he can fill that into the other categories.

Well, we actually track almost all of the cash we spend. The remaining $24 a month is all the random things that you never quite track. Parking meter money, a drink or a candy bar, handing the littlest one a dollar when she pulls weeds or washes windows. And although we could track it to the nickel, having a little bit of freedom probably keeps us from going stir-crazy. (I have a similar system that I use with my cash.)

"Fun, books, movies, music" seems way too low at $4/month. Does he get a newspaper? magazines? Ever buy a book or go to a movie with the kids? I cannot remember the last time I bought a book for $4 or less. That seems too low for me. There's frugal, and then there's unrealistic.

There is a small amount of additional “fun” in our joint expenses. In addition, we often give gifts of “fun” things to use or do. Books, gift cards, concert tickets, etc. are almost always gifts rather than items we purchase ourselves.

Oh - the comment about tearing down the barn. I'd not do this. In many zoning jurisdictions some non-conforming structures are grandfathered in, but once gone cannot then be replaced. My lot once had a garage building at the back of the lot. Most houses in my neighborhood have these and are mostly used as studios or out-buildings. But it was torn down some time many years ago. I cannot build such a structure today even to replace what was there, as it would not be allowed.

I think his property is worth more with the barn on it, particularly considering the pasture they have. I’d like to see it generate income, but haven’t figured out how to do that yet.

We would love to combine households. In order to do it, he would have to come toward me. My custody agreement and unique circumstances mean I can’t leave the DC area. And that would mean that he would need to be able to both pay for college AND pay child support, because it’s unlikely the boys would come along. That would probably cost about as much as his current mortgage.

While child support would potentially cost as much as his current mortgage, you (as a couple) would cut significant other expenses, like every weekend trip costs, wear and tear on your autos, the 'unending 4H chicken project', the food bill for 2 teenagers, etc.

If anyone knows of a good job for a research scientist/agricultural engineer in the DC area, let me know. And yes, we peruse USAJobs on a weekly basis.

USA jobs is probably the best resource for that type of job in the DC area. You may also want to look at the extension services for surrounding states and universities that offer ag degrees.

(Who, way back a while, was sending money to help her sister in lieu of funding her own retirement when she found out her sister had a giant retirement account. Doh!)

Heh. I doubt we're doing something similar. I find that this is an area where I need to let DH take the lead; I wasn't raised in any church, much less one that put a lot of emphasis on tithes. I do know that when I'm driving through the wilderness of Pennsylvania listening to the Christian radio shows, the financial ones say to never stop tithing, even if it means you don't have enough to eat. I don't understand that advice, but also know that I don't understand a lot about Christianity.

One thing that came to mind for me is that we currently have quite a few categories for lumpy expenses. Some of them are funded, some are not. . . . So perhaps one of the problems is that we build up a reserve for a lumpy expense, and then it doesn’t happen. Reserve sits there while we go in the hole somewhere else.

In general, the more categories you have the more money it looks like you have to save up. In tension with this, having fewer categories runs the risk of letting you overlook things or double count savings, until Something Bad happens. Envelope budgeting is a dance between eating beans and rice because you don't have enough saved for everything on your wish list, and not having funds to pay for car repairs because you put all "repairs" together and needed to fix both the car and the barn.

During the course of a very *interesting* (in the "Chinese curse" sense) budget year of 2008, I ended up deciding I needed a budget category for Unexpected Expenses. I originally wanted to fund that at $1000, but daughter pulling the $1000 deductible car into the side of the $1000 deductible garage convinced me that $2000 would be a better number. I'm still working on it.

The point of an Unexpected Expenses envelope is that you hope it stays untouched at whatever level you fund it; but it's the category you rob when you need a $1400 car repair and you only have $800 in the auto maintenance envelope. Then you work like heck to build it back up. Psychologically, it's something like DH's view of $10K in checking before his budget got more detailed, only it's *in addition* to the budgeted amounts that are expected to be spent.

If you think DH's ex hauling him back to court is a 25% probability, you could use the $1000 in Legal as the start of an Unexpected Expenses category, and expect that category to cover the contingency of going to court with DH's ex. Of course, if that's part of its mission you will want more than $1000 in that envelope. Murphy has been known to knock twice in quick succession.

Using an Unexpected Expenses envelope doesn't solve the problem of not finding enough dollars to put in all the lumpy expense envelopes; but it can be a way to make sure you don't go overboard saving money in envelopes for 14 things that don't turn out to happen.

Okay, so DH is tracking every penny. Why do the expenditures not add up to the income, then?

Probably because I can't figure out how to show an accurate representation of expenses. If you give me exact things to post (like, use this Mvelopes report with these criteria), I'd be happy to be even more specific on what everything looks like.

If DH is tracking every penny, and can't seem to find money to put into the freedom fund and/or emergency fund, then he must be spending every penny, right? So why do his expenditures NOT add up to his income? Those are the 'holes' you need to find and plug.

According to the Mvelopes cash flow report, DH has a positive cash flow of $3,500 over the last year. And yet I still feel like we're sinking because of how the negative envelopes pop up and I can't find funds to cover them.

I also agree that looking at the spending over 3 months is probably not long enough - a year would be the minimum, to capture annual expenditures. That way, DH can also get a look at the seasonality in the 'lumpiness' of expenditures.

We have a total of, hmmm, something like 18 months of budget data in Mvelopes for him. So if you want a year of data, I can pull that, too. Just tell me what you want to see.

Probably because I can't figure out how to show an accurate representation of expenses. If you give me exact things to post (like, use this Mvelopes report with these criteria), I'd be happy to be even more specific on what everything looks like.

Sorry, I am not familiar with Mvelopes. But can you download the data to a spreadsheet or something, and categorize things yourself? I sometimes see that people become too dependent on their software tools, and the software tools aren't point the details out to them in a way that they can see what their issue is.

According to the Mvelopes cash flow report, DH has a positive cash flow of $3,500 over the last year.

So, does he have $3,500 more in savings than he had last year? Or has he paid down an additional $3,500 in debt? If not, where did that $3,500 go? That's what you need to figure out.

We have a total of, hmmm, something like 18 months of budget data in Mvelopes for him. So if you want a year of data, I can pull that, too. Just tell me what you want to see.

It's not so much what I want to see - it's what you/he need to do to figure out where the money went. If the way that Mvelopes is presenting the data to him is saying that he should have $3500 more in his savings and/or checking accounts than he did at this time last year, and he can't find that money, then I would say that the Mvelopes tool isn't working for him.

According to the Mvelopes cash flow report, DH has a positive cash flow of $3,500 over the last year. And yet I still feel like we're sinking because of how the negative envelopes pop up and I can't find funds to cover them.

Stretching a bit here, I'm going to take a couple guesses based on what I've read of how Mvelopes, which I don't use, compares to YNAB, which I use extensively. Both are envelope based budget systems, and I'll try to extrapolate from the YNAB experience to what's probably going on in Mvelopes.

The idea of budgeting focuses on income and expense, or cash inflows and cash outflows. An envelope budget system adds the wrinkle of letting you carry over positive balances (or deficits, apparently) to future months. So you might start a month with $12 in the Grocery envelope, budget $500, and have $512 that you could spend on groceries that month. If you only spent $477, you'd have $35 left in the Grocery envelope for the next month. If you spent $537, you'd have a $25 negative to make up however that particular system has you work with things.

If Mvelopes is saying DH has $3,500 positive cash flow over the past year, that ought to mean that the total amount in all envelopes is $3,500 higher than it was a year ago. It doesn't necessarily mean that every envelope has positive money, and it doesn't necessarily mean he is in good shape; there may be reasons why he needs more than that sitting in the various envelopes waiting for the needs that the envelopes are designated for.

What would make sense to track from a budgeting perspective is, how much was in the envelopes at the start of the period; how much did he put into the envelopes; how much was spent from the envelopes; and how much is in the envelopes at the end of the period.

The total of everything in the envelopes probably ought to tie to his checking and savings account balances; depending on how Mvelopes accounts for credit cards used for budgeted expenses, you might need an adjustment to account for the outstanding credit card charges as well.

One of the places money can hide in an envelope based budget system is overfunded categories. Say I budget $175 per month to groceries. I run a couple months spending around $170, then have a couple good months spending $120 per month. Now I have $120 extra in the Grocery envelope. If I put another $175 in, and see $295 in the Grocery envelope, I could think I'm rich in the grocery sense and go blow it on party food or something. A better practice would be to take some of it out--maybe $70 worth--and put that in a different envelope. I started out doing that a lot in response to expenses popping up that I didn't have funds for; now I'm doing it deliberately to fund envelopes that don't get enough regular budget money until I see what categories I can underspend the budget.

I infer that Mvelopes, unlike YNAB, lets you carry a negative balance in an envelope from month to month. Without the discipline of being required to clear the negative balances each month (otherwise YNAB takes it out of what I have to budget next month), I might have taken a lot longer to figure out that I had money I could salvage from categories that were budgeted, umm, more comfortably than they needed to be.

At a guess, I'd say you need to stop fixating on just the negative envelopes, and also look to see if you have envelopes that carry a bigger positive balance than they need. Assuming you find a few like that, skim the excess out of them and throw it at the negatives. You will have the same amount of total money, but a clearer picture of what you can afford to spend by category.

More accurately, since it's DH's budget we're talking about, DH needs to go through the drill with you to see what the envelopes look like. Ultimately, if the two of you find overfunded envelopes, it will be DH's call on how to shuffle the dollars around.

>>Most of this expense [$176/month] is the unending 4H “chicken project.” Which involves the boys having well over 100 show chickens (at their mom’s house). The budget has been reduced here, and it is a very sore point between DH and his ex. One of the many hard choices available to take this on, which would likely create a (not small) fight with his ex and with the boys.<<

OK, I've been lurking on this board for a couple of years now and this is by far the most excellent line item from any budget I've ever seen posted! Show chickens?!? Awesome! I think you should get extra step-parent points for posting this with a kindly straight face and no ranting whatsoever.

>>It might genuinely be easier to go without groceries.<<

No need, as elimination of "show chicken" expenses should yield a corresponding reduction, however brief, in the grocery bill. ;-)

I cannot remember the last time I bought a book for $4 or less. That seems too low for me. There's frugal, and then there's unrealistic.

I have bought pleanty of books for less than $4. Used book stores, library sales, thrift shops & garage/yard sales are some of the main places. As long as the OP's DH is not addicted to books like some are, $4 can be realistic.

Well, sure - my last book was $1. But my point remains that for all "fun" including books for an entire month - with kids - $4 is way too low. I mostly go to the library, hardly ever go out to the movies in theatres, and am a happy homebody. But I pay way more than $4/month for books/music/movies. That's <$50 for the whole YEAR. For four people that's around $12 each for an entire year of books/movies/fun. Possible? I guess. Sure. Likely? No.

Well, sure - my last book was $1. But my point remains that for all "fun" including books for an entire month - with kids - $4 is way too low. I mostly go to the library, hardly ever go out to the movies in theatres, and am a happy homebody. But I pay way more than $4/month for books/music/movies. That's <$50 for the whole YEAR. For four people that's around $12 each for an entire year of books/movies/fun. Possible? I guess. Sure. Likely? No.

When the kids were growing up, we went to one bargain matinee movie a year - yes, really and went many months buying no books. This would be even easier now since our library has a good selection of dvds. It was the case of wanting something(college) more than something else(piddling away money along the way). I still read many, many books and am not buying many at all - even though I could easily afford to at this point. Spending money isn't really a requirement for having fun(well, except if maybe birth control choice isn't permanent)

In general, the more categories you have the more money it looks like you have to save up. In tension with this, having fewer categories runs the risk of letting you overlook things or double count savings, until Something Bad happens. Envelope budgeting is a dance between eating beans and rice because you don't have enough saved for everything on your wish list, and not having funds to pay for car repairs because you put all "repairs" together and needed to fix both the car and the barn.

Well said, Patzer.

I have this problem now. I have enough cash and money and am satisfied that I am making progress, but I run across the OMG now and again. I realize that I am not saving for that specific obligation. When I list the categories it is daunting to think about how much I have to save and how little each catgory gets. They don't seem to add up as quickly as I would like.

Sorry, I am not familiar with Mvelopes. But can you download the data to a spreadsheet or something, and categorize things yourself? I sometimes see that people become too dependent on their software tools, and the software tools aren't point the details out to them in a way that they can see what their issue is.

Yes, I can download the data and categorize it myself if need be, but I’m not sure that’s the problem.

So, does he have $3,500 more in savings than he had last year? Or has he paid down an additional $3,500 in debt? If not, where did that $3,500 go? That's what you need to figure out.

This, on the other hand, was an excellent suggestion. So I went and looked. He’s within $300 of the totals he had last year. So where did the money go? So from that, it looks like he’s neither gained nor lost, but just shifted money around. Except that the dates don’t exactly correlate, and since every month involves several $2,000+ transactions (paychecks coming in, credit card payment going out), it’s hard to say whether that’s just because of the specific time frame of the data I pulled or whether it’s real.

Stretching a bit here, I'm going to take a couple guesses based on what I've read of how Mvelopes, which I don't use, compares to YNAB, which I use extensively. Both are envelope based budget systems, and I'll try to extrapolate from the YNAB experience to what's probably going on in Mvelopes.

Thanks, Patzer. Your summary seemed to be pretty insightful, even coming at it from a different budgeting system.

The idea of budgeting focuses on income and expense, or cash inflows and cash outflows. An envelope budget system adds the wrinkle of letting you carry over positive balances (or deficits, apparently) to future months. So you might start a month with $12 in the Grocery envelope, budget $500, and have $512 that you could spend on groceries that month. If you only spent $477, you'd have $35 left in the Grocery envelope for the next month. If you spent $537, you'd have a $25 negative to make up however that particular system has you work with things.

Yup, that’s identical to Mvelopes.

If Mvelopes is saying DH has $3,500 positive cash flow over the past year, that ought to mean that the total amount in all envelopes is $3,500 higher than it was a year ago. It doesn't necessarily mean that every envelope has positive money, and it doesn't necessarily mean he is in good shape; there may be reasons why he needs more than that sitting in the various envelopes waiting for the needs that the envelopes are designated for.

That’s true. And one thing we have done is to allocate money so that he doesn’t go negative in any of the envelopes that require quarterly payments. For a while there were several areas where he was going way negative and then having to build it back up. We used his last “extra” paycheck to deal with those.

What would make sense to track from a budgeting perspective is, how much was in the envelopes at the start of the period; how much did he put into the envelopes; how much was spent from the envelopes; and how much is in the envelopes at the end of the period.

Hm. Okay. That I can do. I think. Well, I can certainly do cash flow in and out of each envelope and the envelope balance today. I don’t know if I can get the initial envelope balances from a year ago.

The total of everything in the envelopes probably ought to tie to his checking and savings account balances; depending on how Mvelopes accounts for credit cards used for budgeted expenses, you might need an adjustment to account for the outstanding credit card charges as well.

Yes, it tracks to checking, savings, and credit card purchases. Any transaction that has cleared any of those institutions shows in Mvelopes and can be filed in an envelope.

One of the places money can hide in an envelope based budget system is overfunded categories. Say I budget $175 per month to groceries. I run a couple months spending around $170, then have a couple good months spending $120 per month. Now I have $120 extra in the Grocery envelope. If I put another $175 in, and see $295 in the Grocery envelope, I could think I'm rich in the grocery sense and go blow it on party food or something. A better practice would be to take some of it out--maybe $70 worth--and put that in a different envelope. I started out doing that a lot in response to expenses popping up that I didn't have funds for; now I'm doing it deliberately to fund envelopes that don't get enough regular budget money until I see what categories I can underspend the budget.

Hm. I think that may indeed have happened with the grocery budget over the holidays. We were building up for the beef purchase, but DH ended up baking a lot over the holidays and sent his grocery envelope negative last month when the cow came home. (Sorry, couldn’t resist.) And yes, I think perhaps taking a fair bit of money and putting it somewhere else is what may make sense.

I infer that Mvelopes, unlike YNAB, lets you carry a negative balance in an envelope from month to month. Without the discipline of being required to clear the negative balances each month (otherwise YNAB takes it out of what I have to budget next month), I might have taken a lot longer to figure out that I had money I could salvage from categories that were budgeted, umm, more comfortably than they needed to be.

Yes indeed. At the same time, DH thought I had way overbudgeted for his utilities costs last fall… until he got the three highest electric bills he’s ever had over the winter. (Electric heat. Not helpful, but that’s what he’s got. There isn’t even duct work in the house, though there is a very high quality wood-burning furnace, complete with its own room, in the basement.)

At a guess, I'd say you need to stop fixating on just the negative envelopes, and also look to see if you have envelopes that carry a bigger positive balance than they need. Assuming you find a few like that, skim the excess out of them and throw it at the negatives. You will have the same amount of total money, but a clearer picture of what you can afford to spend by category.

Hm. Well, since we just in December finally allocated a paycheck to deal with a lot of things that were going negative on a quarterly basis, I’m a bit loathe to sweep money out of envelopes, but I see your point. I do think that I may suggest we combine the “safety margin” funds in the legal and medical folders.

More accurately, since it's DH's budget we're talking about, DH needs to go through the drill with you to see what the envelopes look like. Ultimately, if the two of you find overfunded envelopes, it will be DH's call on how to shuffle the dollars around.

Yep, that’s how we do it. I’m a number-cruncher much more than he is, so I usually do a lot of the detailed analysis. But we don’t do anything until we’ve gone through all of it together and we talk about what changes to make. Then I shift things around, again because I’m the one who looks at budget spreadsheets as a calming ritual.

(He bakes when he’s stressed, and is one of the best cooks I’ve ever met. If you’re ever an hour south of Cleveland in a town no one’s ever heard of, stop by and we’ll see if there are oatmeal scones available. Heaven. Absolutely heaven.)

Consider looking for scholarships.What are the kids' majors? Check for scholarships for those majors from societies and companies that are related.

Hmmmm. Possible. Not likely for DS1, who doesn't like to think about that kind of thing, but possible for DS2, DS3, and DD. The high school counselors may not be much help, but the financial aid office at the college might be. I'll suggest it to DH.

ThyPeace, now wondering whether show chickens come with scholarships...

The high school counselors may not be much help, but the financial aid office at the college might be. I'll suggest it to DH.

ThyPeace, now wondering whether show chickens come with scholarships...

Check www.fastweb.com; they list scholarships for everything. You fill out a profile based on your interests, parent info, etc. and they search hundreds of thousands of scholarships and grants to provide you with the ones best suited to your inidividual situation.

OK, I've been lurking on this board for a couple of years now and this is by far the most excellent line item from any budget I've ever seen posted! Show chickens?!? Awesome! I think you should get extra step-parent points for posting this with a kindly straight face and no ranting whatsoever.

Soozfool, thank you very much for making me laugh out loud in the middle of this exercise! I must admit it took me a while to believe that show chickens really exist and that people keep them even though they don't lay very many eggs (in comparison to breeds that are specifically for eggs).

As for the straight face, well, I've known my husband for five years and the boys have had chickens for four years now. I'm a city girl born and bred, but give me enough time and I'll accept anything.

I do think the barn would be a great place for a cow, but DH gets hives when I talk like that.

>>It might genuinely be easier to go without groceries.<<

No need, as elimination of "show chicken" expenses should yield a corresponding reduction, however brief, in the grocery bill. ;-)

Well, that would benefit the boys' mom, anyway.

What do show chickens taste like?

I would love to make a joke about this, but unfortunately, I don't actually know that they taste like. My guess is that they're pretty tough -- they don't usually butcher them until they're older than most of the chicken you'd buy at a grocery store.

I would love to make a joke about this, but unfortunately, I don't actually know that they taste like. My guess is that they're pretty tough -- they don't usually butcher them until they're older than most of the chicken you'd buy at a grocery store.

Am I the only one that thinks this question is funny on it's own because of the implied answer? That they taste like chicken????

<sigh>

I totally cracked myself up when I was writing it. Good thing I'm not an egg.

But my point remains that for all "fun" including books for an entire month - with kids - $4 is way too low. I mostly go to the library, hardly ever go out to the movies in theatres, and am a happy homebody. But I pay way more than $4/month for books/music/movies. That's <$50 for the whole YEAR. For four people that's around $12 each for an entire year of books/movies/fun. Possible? I guess. Sure. Likely? No.

In the entire time I've known them, neither DH nor any of the boys have purchased more than one or two "fun" books to read. It's just not part of their world. DH does read nonfiction, but even those books are pretty rare. And again, remember that DH and I have a joint expenses envelope that includes joint "fun" stuff that we do together. So for example, if we go to a movie together, that goes into joint expenses. We average $12 a month in joint "fun" expenses. And there are also "fun" expenses that are given as gifts. I got DH Brad Paisley tickets for his birthday, for example.

Running two budgets has many advantages. This is one area where it doesn't, because things get split into several categories that might be better combined. But because the funding streams are separate, we track them separately.

Soozfool, thank you very much for making me laugh out loud in the middle of this exercise! I must admit it took me a while to believe that show chickens really exist and that people keep them even though they don't lay very many eggs (in comparison to breeds that are specifically for eggs).

At some point you should go to a real county fair. The Topsfield Fair, several miles north of me, has huge buildings filled with show chickens, show rabbits, show cattle, sheep, carriage horses, pulling horses, needlework, quilts, pumpkins, and a thousand other things.

They're all fascinating to look at, but I've got to tell you; if I had to live with those d****d roosters, I'd be living on chicken stew for weeks. Or rooster stew, actually.

DH thought I had way overbudgeted for his utilities costs last fall… until he got the three highest electric bills he’s ever had over the winter.

Weather is the wild card in budgeting for utilities. I started budgeting in January 08 at the average level of my gas & electric bill for the previous 12 months. In April, I stopped overshooting and started building for the following heating season. Then I got a notice of increased natural gas prices, and jacked up the monthly budget. Turned out we had a mild winter; the other day I transfered $400 left over in the gas & electric category over to longer term savings categories. Staring with May, I'll be rebuilding dollars in gas & electric for the next heating season.

Having had to scrape dollars in the current month to cover the gas & electric, and having been through a 12 month cycle with dollars left over in the envelope, I'd rather have the dollars left over. This does require that I periodically quantify excess dollars left over and redirect them, lest overbudgeting for gas & electric keep me from doing other things.

I laughed out loud, Regattagirl. That was exactly what I wanted to write... except I don't actually know that for sure.

And absolutely, Windowseat! I've been to the county fair in my husband's county. Chickens chickens chickens chickens chickens and more chickens. Turns out the fair in my home county, right next to Washington DC, is pretty much the same. Except they have more rabbits.

I've also been to the Ohio State Fair, where I saw a giant cow made entirely of butter. There's something you don't see every day! You'd think I would have, seeing as how I grew up in Wisconsin, but I grew up on the industrial and shipping-focused shores of Lake Michigan, rather than in farm country.

Doesn't matter whether you give a show chicken a scholarship. She'll never get her freshman English papers in on time, because she types by the hunt and peck method.

Heh. Then again, Chicken Little got quite a lot of funding from the Department of Homeland Security a couple of years ago. Unfortunately, she hasn't been able to complete the proof of concept sky-holding dome, so her funding is now in question.

In general, the more categories you have the more money it looks like you have to save up. In tension with this, having fewer categories runs the risk of letting you overlook things or double count savings, until Something Bad happens. Envelope budgeting is a dance between eating beans and rice because you don't have enough saved for everything on your wish list, and not having funds to pay for car repairs because you put all "repairs" together and needed to fix both the car and the barn.

I've been using YNAB for about 9 months now and I've struggled with this. What has ended up working best for me is something like this:

1. Each month I set up budgets amounts for what I think the expense will be that month. I found that -- for me -- saving up money in categories to carry over just didn't work well.

2. Throughout the month if some category is going to significantly more or less than what I projected I go in and rebalance. If I increase one category by $100, though, I have to find something else to cut by $100. I want my overall number for the month to be close to zero.

3. I budget some amount to irregular expenses. That money does carry over from month to month. So if I suddenly have to have some expense that I can't cover from the adjusting above then I cover it from the irregular expense category. I determined the amount of that category by adding up all the irregular expenses and the contingent expenses and then applying a likelihood factor to them. That is, some irregular expenses are irregular but 100% likely (real estate taxes for example). On the other hand, some expenses may not occur during that year or the amount may vary widely (auto repairs). Now, it is possible that every contingent might hit in a maximum amount, but not really likely. So, I do the irregular expense fund to cover that.

4. In our case we still have some debt to pay off. I have a minimum snowball amount I budget at the beginning of the month. If we have a good month and there is extra money available to budget then I throw the extra to the snowball for that month only. (And, btw, for the first time in about, umm, 15 years our credit card debt is now just under $20,000!).

I do know that when I'm driving through the wilderness of Pennsylvania listening to the Christian radio shows, the financial ones say to never stop tithing, even if it means you don't have enough to eat. I don't understand that advice, but also know that I don't understand a lot about Christianity.

This point is hammered on the protestant side, so if I were you I wouldn't push. There's a lot of belief that god will reward you for giving. I am told that Catholics believe in Talent, Time or Treasure, which sounds like a nice system.

In general, the more categories you have the more money it looks like you have to save up. In tension with this, having fewer categories runs the risk of letting you overlook things or double count savings, until Something Bad happens. Envelope budgeting is a dance between eating beans and rice because you don't have enough saved for everything on your wish list, and not having funds to pay for car repairs because you put all "repairs" together and needed to fix both the car and the barn.

I've chosen to lump all these categories together in a sinking fund and save a set amount each month for all of them. The one stipulation is that it does not include anything that I consider a "choice" only "have to's" such as car/house repair (and NOT car/house "fixups").

I think, in your position I would try very hard to NOT to carry over negatives. When I first started using YNAB I really wanted to carry over my negatives figuring I had budgeted X for the year I should be able to spend it now. But in fact I've found that having to deal with the negatives immediately is a real wake up call for what needs to be funded more and what can be cut.

Hi ThyPeace, it sounds like your DH is in the same situation as we are: we already live frugally & there really is no room in the budget to cut more. If we want to squeeze any more water from this stone, we'd have to make the hard choices. We'd like to save more, but that would mean giving up our condo (which we are upsideown on).

I don't really have any advice, just want to let you know you're not alone & it really is *this* hard sometimes.

Well, seeing as how they have "eating out", "gifts", "kids activities" & other categories that may also cover these items, it does not seem so odd. And the figure is an average of 3 months, so it's possible OP's DH spent $12 once in 3 months for these types of things, that was not covered elsewhere. Not really the same as $4 a month.

...I noticed no one has mentioned anything about the monthly $50 going to a vacation fund...

Wow, I totally missed that! Generally that's the first thing I pounce on, because IMHO travel-type vacations are totally optional. When my children were growing up, we went on very, very few family vacations. Maybe one every 5 years, on average.

Granted, in the DC area there are things to do without leaving home, but anyone who has a library and/or TV available can do a "change of pace" vacation without travelling or otherwise spending money. And given that OP's (step-)children already have a variety of activities (school and 4H related), and that OP and her DH already travel (to see each other), vacations for them would, I think, be an easy item to cut.

I noticed no one has mentioned anything about the monthly $50 going to a vacation fund.

I know everyones' priorities are different but isn't saving for a vacation the same as saving for another luxury item?

Another excellent item to consider, it's true. We have been steadily reducing our "vacations" (all of them are associated with family events such as 50th anniversaries for parents) in the last year, and have missed several events already. We know we'll miss more. It's down to the "really hard choices" place here, just like all the others. That's why I started this thread -- to see if there were things we were missing, and also to face the fact that we still need to look harder no matter how painful it is.

I think, in your position I would try very hard to NOT to carry over negatives. When I first started using YNAB I really wanted to carry over my negatives figuring I had budgeted X for the year I should be able to spend it now. But in fact I've found that having to deal with the negatives immediately is a real wake up call for what needs to be funded more and what can be cut.

Good point. On my side of the budget, I tend to rebalance things quickly because the negatives make my teeth ache. Perhaps we should be more proactive about that with his side, as well. Something to talk to him about this weekend on the long drive to Indiana...

During the course of a very *interesting* (in the "Chinese curse" sense) budget year of 2008, I ended up deciding I needed a budget category for Unexpected Expenses. I originally wanted to fund that at $1000, but daughter pulling the $1000 deductible car into the side of the $1000 deductible garage convinced me that $2000 would be a better number. I'm still working on it....

I like this idea, and never got back to it very well. It's very much like the "major purchase" category I've had in my budget for probably 10 years, when I realized that there was always one big purchase every year that I didn't know what it would be, but it was always there.

Then I started thinking about all the things like that I know are likely to happen, but don't know when. Here's my rough guesses on what those costs might look like in the next six years (the longest he's likely to live in his house).

My DD searched everywhere for scholarship money--and this was before the internet. She managed to win a National Merit Scholarship and a scholarship from a local square dance club, who give a scholarship to a HS graduate of our (former) town every year. They gave her $2,000/year for all 4 years of college IIRC--I think NMS also paid that much. Sweet.

He bakes when he’s stressed, and is one of the best cooks I’ve ever met.

I wonder if he might bake year-round for needy families sponsored by his church, Meals on Wheels, homeless shelter, group home for disabled adults, an orphanage, or the like--instead of tithing or to make up for lower tithing.

My father took up cooking and then baking when he retired (my mother was much younger and still working for 12 more years till her retirement). He taught baking classes at a local gourmet shop and gave loaves of bread and scones to everyone from his fellow regulars at the town pool, to the doctor's office, bank tellers, etc. Baking and giving his baked goods gave him a lot of pleasure late in life.

Also, by next year I bet your husband could start/run/be an active part of a personal finance club at church.

I wonder if he might bake year-round for needy families sponsored by his church, Meals on Wheels, homeless shelter, group home for disabled adults, an orphanage, or the like--instead of tithing or to make up for lower tithing.

My father took up cooking and then baking when he retired (my mother was much younger and still working for 12 more years till her retirement). He taught baking classes at a local gourmet shop and gave loaves of bread and scones to everyone from his fellow regulars at the town pool, to the doctor's office, bank tellers, etc. Baking and giving his baked goods gave him a lot of pleasure late in life.

I knew someone who, every week, would bring three loaves of her bread to church. She charged, oh, three or four dollars per loaf and the money always went toward tuning the organ and the piano.

It was a way she could contribute more, with her only costs being the ingredients.

We have been steadily reducing our "vacations" (all of them are associated with family events such as 50th anniversaries for parents) in the last year, and have missed several events already.

I'm glad you clarified this and I wouldn't consider these "vacation" at all but rather family travel obligations.

Some family events are truly obligatory, but over the years I've gotten better about declining the few that would be totally onerous. That way, I can view the others as mini-vacations. At a wedding, for example, even though I'm related to the bride or groom, we might not be close and I might not even like them. However, a wedding's a great excuse for a family reunion, and I do enjoy visiting with cousins or in-laws I wouldn't see otherwise. Plus, when else do I get to dance?

That said, I take back my suggestion for removing this from the budget. It's $600/yr, and if you include airfare, car rental, hotel, and gift, that's pretty cheap. I typically allow $1k per trip anytime DH and I travel.

Today I'm off to one of those obligatory family events -- my husband's parents' 50th anniversary party. I'm downloading this entire thread so we can chat about it on the 5 hour drive from Cleveland to South Bend. Last thing I'm doing before I go get on the plane to Cleveland. Have a wonderful weekend, everyone!